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View All NewsKelly Services revenue up 2.7% amid inflationary pressures, talent supply issues
Kelly Services Inc. (NASDAQ: KELYA, KELYB) reported demand for talent continues amid inflationary pressures and talent supply challenges. Second-quarter revenue at the global staffing firm rose 2.7% in constant currency.
“We saw solid demand for Kelly’s specialties in the second quarter and, importantly, we are successfully translating revenue into strong gross profit growth,” President and CEO Peter Quigley said.
US revenue rose 3.8% year over year.
| (US$ millions) | Q2 2022 | Q2 2021 | % change | % constant currency |
| Revenue | $1,267.3 | $1,258.1 | 0.7% | 2.7% |
| Gross profit | $262.4 | $231.0 | 13.6% | 15.6% |
| Gross margin | 20.7% | 18.4% | ||
| Net earnings | $2.2 | $24.0 | 207.1% |
Second-quarter revenue growth included a 150-basis point favorable impact from the acquisitions of RocketPower, a recruitment process outsourcing firm, and Pediatric Therapeutic Services, a specialty firm providing in-school therapy services.
On the other hand, changes in the Mexican staffing market and the transition of Kelly’s Russia business had a negative impact on revenue growth of 250 basis points.
Mexican revenue fell by 66.2% on a constant currency basis, and Russian revenue fell by 24.6%.
Revenue by segment
| (US$ millions) | Q2 2022 | Q2 2021 | % change | % constant currency |
| Professional & industrial | $415.8 | $466.5 | -10.9% | 10.6% |
| Science, engineering and technology | $324.3 | $298.2 | 8.7% | 9.0% |
| Education | $155.5 | $105.9 | 46.8% | 46.8% |
| Outsourcing & consulting | $124.4 | $107.3 | 16.0% | 17.3% |
| International | $247.6 | $280.4 | -11.7% | -4.3% |
Revenue from RocketPower is included in Kelly’s outsourcing and consulting segment while revenue from Pediatric Therapeutic Services is included in the company’s education segment.
KellyOCG, where revenue rose 17.3% in constant currency, includes MSP, RPO, professional payroll outsourcing and consulting services.
Revenue by geography
| (US$ millions) | Q2 2022 | Q2 2021 | % change | % constant currency |
| Americas | ||||
| United States | $928.9 | $894.6 | 3.8% | 3.8% |
| Canada | $40.3 | $39.5 | 1.8% | 6.0% |
| Puerto Rico | $28.9 | $26.9 | 7.7% | 7.7% |
| Mexico | $11.2 | $33.1 | -66.3% | -66.2% |
| Europe | ||||
| Switzerland | $55.3 | $54.0 | 2.4% | 8.7% |
| France | $50.4 | $57.5 | -12.4% | -0.7% |
| Portugal | $42.0 | $40.6 | 3.5% | 17.3% |
| Russia | $28.7 | $33.7 | -14.6% | -24.6% |
| Italy | $18.4 | $19.4 | -5.4% | 7.4% |
| UK | $16.0 | $17.7 | -9.6% | 1.0% |
| Other | $35.7 | $31.8 | 12.1% | 28.3% |
| Asia Pacific | ||||
| Total APAC | $11.5 | $9.3 | 24.2% | 32.1% |
Guidance
Kelly forecast revenue to increase between 3.5% and 4.0% for full-year 2022. The growth rates on an organic basis are forecast at between 2.0% and 2.5%.
Share price and market cap
Shares in Kelly were down 7.43% to $20.68 as of 1:20 p.m. Eastern time; they were 17.28% below their 52-week high, according to FT.com. The company had a market cap of $847.5 million.